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Miix Insurance Co. v. Associated Women's Health Specialists

November 19, 2007

MIIX INSURANCE CO., PLAINTIFF,
v.
ASSOCIATED WOMEN'S HEALTH SPECIALISTS, P.C., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Simandle, District Judge

[relates to Docket Item 8]

HONORABLE JEROME B. SIMANDLE

OPINION

I. INTRODUCTION

This matter comes before the Court on Defendants' motion to dismiss [Docket Item 8] for lack of personal jurisdiction, Fed. R. Civ. P. 12(b)(2); to dismiss or transfer due to improper venue, Fed. R. Civ. P. 12(b)(3); and to decline to exercise jurisdiction under the Declaratory Judgment Act, 28 U.S.C. § 2201, because there is pending litigation in Connecticut and the sought-after declaratory judgment in this action would not terminate the proceedings. The Court heard oral argument on October 22, 2007 and reserved decision. At the request of Plaintiff's counsel, the Court also permitted the parties an additional opportunity to brief the issue whether this Court should transfer venue pursuant to 28 U.S.C. § 1404(a). Having now received and reviewed those supplemental submissions, the Court is prepared to rule on the matter.

For the reasons explained below, the Court finds that it lacks personal jurisdiction over Defendants and that venue is not proper here. The Court shall deny the motion to dismiss but shall exercise its discretion to grant the motion to transfer the matter to the District of Connecticut, pursuant to 28 U.S.C. § 1406(a).

II. BACKGROUND

This case relates to a medical malpractice action that was settled in Connecticut. On May 2, 2000 in Connecticut Superior Court, defendants in this matter Joshua Drown, a minor, and his mother Susan Drown, filed a medical malpractice action, related to treatment during Joshua's birth, against several defendants, including Associated Women's Health Specialists, P.C. ("Associated"), which is also a defendant in this action. Associated is a medical practice in Waterbury, Connecticut that obtained an insurance policy issued by MIIX Insurance Co. ("MIIX"), the plaintiff in this action, from CHA Insurance Services, Inc. in Connecticut. MIIX is a New Jersey corporation with its principal place of business in Riverside, New Jersey.

According to the record before the Court, Associated turned the claim in the Connecticut matter over to its insurer, MIIX, who caused counsel to enter an appearance on Associated's behalf. In September and December 2006, however, MIIX refused to send an adjuster to mediation sessions before a Superior Court judge, despite orders to do so. Accordingly, on December 7, 2006, the Connecticut court entered a default against Associated, which the court declined to set aside. Then, on March 21, 2007, Associated settled with the Drowns for $2 million, the policy limit, and the Drowns agreed not to proceed directly against Associated's assets. According to the defendants in this action, the Drowns and Associated ("Defendants"), the default precluded any defense with regard to liability under Connecticut law.

Less than a month later, MIIX filed this action, on April 6, 2007, seeking a declaration that it is not obligated to indemnify Associated or the Drowns under its policy of insurance because the policy allegedly excludes coverage for acts or omissions by individual physicians in the employ of Associated. (Compl. ¶¶ 10-17.) On April 17, 2007, Susan Drown filed an action against MIIX in U.S. District Court for the District of Connecticut to force compliance with the asserted obligation to pay on Associated's behalf. That matter is pending before U.S. District Judge Robert Chatigny, who denied a motion to transfer venue on June 5, 2007 and has entered a scheduling order and case management plan.

It is undisputed that Associated acquired the insurance policy at issue through an agent in Connecticut to cover Associated's Connecticut medical practice. Plaintiffs allege that this Court has subject matter jurisdiction over its state law claims against these Connecticut Defendants pursuant to 28 U.S.C. § 1332.

III. PARTIES' ARGUMENTS

A. Defendants

Defendants argue that this Court lacks personal jurisdiction over all of them.*fn1 They argue that the Drowns have had no contact whatsoever with New Jersey and could have had no expectation that they might be sued here. (Def. Br. at 8.) Defendants argue that the only contact Associated has had with New Jersey was obtaining an insurance policy in Connecticut, through a Connecticut broker, issued by a New Jersey insurer (MIIX), that was licensed to do business in Connecticut. Therefore, they claim they do not have the minimum contacts necessary with this forum that are necessary for the Court to constitutionally exercise jurisdiction over them.

Defendants also argue that venue is not proper here under 28 U.S.C. § 1391(a)(2) because a substantial part of the events or omissions giving rise to the claim did not occur in New Jersey. Therefore, they ask that the case be dismissed or transferred to the District of Connecticut, pursuant to 28 U.S.C. §§ 1404, 1406(a).

Finally, Defendants argue that the Court should dismiss this declaratory judgment action because this case is not appropriate for a declaratory judgment under 28 U.S.C. § 2201. As Defendants point out in their reply brief, Plaintiff fails to address this argument in opposition to the motion; however, the matter was discussed at oral argument.

B. Plaintiff

Plaintiff argues that Defendants' contacts with New Jersey are sufficient for specific jurisdiction and that venue is proper here.

First, MIIX argues that Associated had substantial and ongoing contacts with MIIX in New Jersey, related to this action. Plaintiff alleges that Associated obtained a policy of insurance from MIIX through MIIX's New Jersey office; that all underwriting for the policy was done in New Jersey; and that Associated communicated with MIIX in New Jersey regarding the underwriting, issuance and non-renewal of the policy. Plaintiff also notes that Associated submitted its claim for coverage to MIIX in New Jersey and that Associated's attorney sent faxes and letters to MIIX in New Jersey discussing the coverage issues that are the subject of this declaratory judgment action. MIIX also notes that Associated paid premiums to it in New Jersey, as the contract required. Therefore, MIIX argues, it is fair to exercise personal jurisdiction over Associated in this matter.

Next, MIIX argues that because the Drowns are assignees of Associated's rights under its insurance contract with MIIX, they stand in the shoes of Associated and Associated's contacts with New Jersey may be attributed to the Drowns. Although the cases MIIX cites for this proposition are not persuasive, as discussed below, Defendants completely ignore and fail to address this argument.

The final points MIIX makes with regard to personal jurisdiction are that it does not otherwise offend rules of fair play and substantial justice because the minimum contacts test is met, a plaintiff's choice of forum should normally prevail, the matter does not present an undue hardship to the Drowns because the Drowns are not witnesses in this case, and this Court is competent to apply whatever state's law it determines should apply to this contract interpretation.

MIIX then argues that venue is proper here under 28 U.S.C. ยง 1391(a)(2) because the insurance policy was issued here, the decision to deny coverage to Associated was made here and this action ...


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